In Stalled Market, Condos Outperform Overpriced KB Homes

Condominium buildings in Key Biscayne’s Garden District, July 18, 2019. Sales activity remains in a slump on the island, according to Multiple Listing Service statistics. (Key News/Claudine Coto Knautz)

Real estate activity on Key Biscayne remains dismal this first half of 2019.

Given the relative uptick in 2018, a bounce-back in 2019 seemed possible, but activity actually decreased by 28% for condominiums and 34% for single-family homes, compared to the same period in 2018, according to data from the Multiple Listing Service.

One big reason: condos are priced 17% above the average sale price. For single-family homes, the average list price is 37% above the average sale price.

During this period, average condo prices dropped 10% and single-family home prices remained flat.

Two-thirds of the condos sold this year were priced under $1 million. Key Biscayne’s median condo sale price is $725,000. One can buy a nice two-bedroom with ocean views for this price, which was very difficult to find a few years back.

While some investors and renters are taking advantage of this lower price point to buy, the impact has not been enough to absorb the inventory that has increased steadily since 2014. A total of 88 condo units sold this first half of the year versus 296 condos actively listed.

What is affordable for Key Biscayne?

Arguably, condos priced under $1 million and single-family homes priced under $2 million. For single-family homes, it’s the second pricing tier between $2 and $4 million that’s had the most traction this year, with 12 of 23 houses sold falling within this second pricing tier. But why?

Remodelled Mackle houses once peaked in the low $2 million range, but these days, the same price will fetch a larger, elevated home built in the 90s or even newer, sales data shows.

Although very difficult to accept, it seems higher activity will mean sellers will simply have to be more realistic about pricing from the start.

So far, that hasn’t happened.

Key Biscayne’s sold condos were on the market for an average of seven months, which coincides with Miami-Dade’s sales pace. However, Key Biscayne single-family homes took much longer to sell at an average of 16 months.

Clearly, only the best-priced properties are selling on the island.

It’s important to consider that Key Biscayne remains an oasis in Miami-Dade County and real estate, like other economic markets, experiences both highs and lows.

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